Quarterly Regional Market Rental review

Posted
on 9 February 2016

Source: CoreLogic RP Data

Summary

Quarterly movements

To end the 2015 calendar year, most regional markets, for houses, saw rents either rise or remain steady with the exception of Western Australia where rents were down -2.6% over the final three months of the year. On the other hand, regional unit market performance was much weaker, with rental rates in Queensland, Tasmania and Western Australia all lower in December 2015 relative to September 2015.

Annual movements

Following on from the release of CoreLogic RP Data's latest capital city rental report showing the lowest annual rate of rental growth on record, it can also be seen that the regional rental market is showing overall weakness on an annual basis. On a broad basis, for houses, most regional areas were showing a fall or no change in rental rates over the 2015 calendar year, with the exception of the two most affordable regional rental markets of Tasmania and South Australia. Across the regional unit markets there was more variation, with rises as great as 6.5% across New South Wales and falls as great as -10.3% in the Northern Territory.

Key regional* rental statistics to December Quarter 2015

NSW

NT

QLD

SA

TAS

VIC

WA

Houses

Median Rent

$350

$480

$350

$265

$265

$290

$370

Qtrly change

0.0%

2.1%

0.0%

1.9%

1.9%

1.8%

-2.6%

YOY change

0.0%

-4.0%

-2.8%

1.9%

1.9%

0.0%

-7.5%

5yr avg annual change

3.1%

1.5%

0.0%

2.0%

1.2%

2.2%

2.9%

Units

Median rent

$330

$350

$330

$200

$230

$250

$320

Qtrly change

3.1%

0.0%

-2.9%

0.0%

-4.2%

2.0%

-3.0%

YOY change

6.5%

-10.3%

0.0%

0.0%

1.1%

2.0%

-8.6%

5 yr avg annual change

3.3%

3.1%

0.6%

2.1%

0.9%

3/1%

2.0%

*Regional rental statistics are calculated across all properties located outside of the capital cities.

Queensland Regional

Houses

Property Type

Median Weekly Rent

Qtr

YOY

3 bedroom

$320

0.0%

-3.0%

4 bedroom

$400

0.0%

-2.4%

5+ bedroom

$510

2.0%

2.0%

All houses

$350

0.0%

-2.8%

Units

Property Type

Median Weekly Rent

Qtr

YOY

1 bedroom

$280

-3.4%

0.0%

2 bedroom

$305

-3.2%

-1.6%

3 bedroom

$370

-2.6%

-2.0%

All units

$330

-2.9%

0.0%

Across regional Queensland, rental rates remained steady for houses over the final quarter of 2015, at $350/week, while for units, a -2.9% decline was recorded, bringing the typical rental rate to $330/week. Both the detached house and unit rental performance over the past year has underperformed when compared to the five year average for the region and interestingly, regional Queensland house rents are currently recording the same median price as they were over the December 2010 quarter.

Across the individual product types, houses with five bedrooms were the strongest performer over the three months to December 2015 with rents up 2.0% to $510/week with rental rates for the other detached housing product types unchanged over the quarter. On an annual basis, houses with five or more bedrooms were also the only product type to record a rise in rents.

Over the December 2015 quarter, weakness across the Fitzroy rental market continues to be apparent, recording the most prominent falls in rental rates across regional Queensland. house rents fell by -6.3% over the three months to December 2015, while unit rents are -7.1% lower over the quarter. Over the past year, the South West region has been the hardest hit rental market for houses, with rents falling by a substantial -28.9%, further highlighting the overall weakness across markets associated with the resources sector.